Summary
In the context of differential information economies, with and without free disposal, we consider the concepts of Radner equilibrium, rational expectations equilibrium, private core, weak fine core and weak fine value. We look into the possible implementation of these concepts as perfect Bayesian or sequential equilibria of noncooperative dynamic formulations. We construct relevant game trees which indicate the sequence of decisions and the information sets, and explain the rules for calculating ex ante expected payoffs. The possibility of implementing an allocation is related to whether or not it is incentive compatible. Implementation through an exogenous third party or an endogenous intermediary is also considered.
This paper comes out of a visit by Nicholas Yannelis to City University, London, in December 2000. We are grateful to Dr A. Hadjiprocopis for his invaluable help with the implementation of Latex in a Unix environment. We also thank Leon Koutsougeras and a referee for several, helpful comments.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Allen, B.: Generic existence of completely revealing equilibria with uncertainty, when prices convey information. Econometrica 49, 1173–1199 (1986)
Allen, B., Yannelis, N.C.: Differential information economies. Economic Theory 18, 263–273 (2001)
Aumann, R. J.: Correlated equilibria as an expression of Bayesian rationality. Econometrica 55, 1–18 (1987)
Emmons, D., Scafuri, A. J.: Value allocations — An exposition. In: Aliprantis, C.D., Burkinshaw, O., Rothman, N. J. (eds.) Advances in economic theory. Lecture notes in economics and mathematical systems, pp. 55–78. Berlin Heidelberg New York: Springer 1985
Einy, E., Moreno, D., Shitovitz, B.: Rational expectations equilibria and the ex post core of an economy with asymmetric information. Journal of Mathematical Economics 34, 527–535 (2000)
Einy, E., Moreno, D., Shitovitz, B.: Competitive and core allocations in large economies with differential information. Economic Theory 34, 321–332 (2001)
Glycopantis, D., Muir, A., Yannelis, N. C: An extensive form interpretation of the private core. Economic Theory 18, 293–319 (2001)
Glycopantis, D., Muir, A., Yannelis, N.C.: On the extensive form implementation of REE. Mimeo (2002)
Hahn, G., Yannelis, N. C: Efficiency and incentive compatibility in differential information economies. Economic Theory 10, 383–411 (1997)
Hahn, G., Yannelis, N.C.: Coalitional Bayesian Nash implementation in differential information economies. Economic Theory 18, 485–509 (2001)
Koutsougeras, L., Yannelis, N. C: Incentive compatibility and information superiority of the core of an economy with differential information. Economic Theory 3, 195–216 (1993)
Krasa, S., Yannelis, N.C.: The value allocation of an economy with differential information. Econometrica 62, 881–900 (1994)
Kreps, M. D., Wilson, R.: Sequential equilibrium. Econometrica 50, 889–904 (1982)
Kuhn, H. W.: Extensive games and the problem of information. In: Kuhn, H. W., Tucker, A. W. (eds.) Contributions to the theory of games, Vol. II. Annals of mathematical studies, Vol. 28, pp. 193–216. Princeton, NJ: Princeton University Press 1953
Kurz, M.: On rational belief equilibria. Economic Theory 4, 859–876 (1994)
Radner, R.: Competitive equilibrium under uncertainty. Econometrica 36, 31–58 (1968)
Scafuri, A. J., Yannelis, N. C: Non-symmetric cardinal value allocations. Econometrica 52, 1365–1368 (1984)
Shapley, L. S.: A value for n-person games. In: Kuhn, H.W., Tucker, A.W. (eds.) Contributions to the theory of games, Vol. II. Annals of mathematical studies, Vol. 28, pp. 307–317. Princeton, NJ: Princeton University Press 1953
Tirole, J.: The theory of industrial organization. Cambridge, MA London: The MIT Press 1988
Wilson, R.: Information, efficiency, and the core of an economy. Econometrica 46, 807–816 (1978)
Yannelis, N.C.: The core of an economy with differential information. Economic Theory 1, 183–198 (1991)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2004 Springer-Verlag Berlin Heidelberg
About this chapter
Cite this chapter
Glycopantis, D., Muir, A., Yannelis, N.C. (2004). On extensive form implementation of contracts in differential information economies. In: Aliprantis, C.D., Arrow, K.J., Hammond, P., Kubler, F., Wu, HM., Yannelis, N.C. (eds) Assets, Beliefs, and Equilibria in Economic Dynamics. Studies in Economic Theory, vol 18. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-05858-9_16
Download citation
DOI: https://doi.org/10.1007/978-3-662-05858-9_16
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-642-05663-5
Online ISBN: 978-3-662-05858-9
eBook Packages: Springer Book Archive